Since the bursting of the “dot.com” bubble and the tragic event of “9/11”, the easing of interest rates in the US and Canada had resulted in easy credit and low mortgage rates. Home prices in metro Vancouver more than double in price from 2001 to today. The housing market bounced back and recovered from a a drop around 15% in late 2007. Home prices recovered all that was lost and buyers confidence returned to the market.

The ultra-low mortgage rates attracted many buyers who might not be able to handle much higher rates when their mortgages are due for renewal. Read more

“Canadians are potentially leaving themselves wide open for significant financial obligations once interest rates begin to rise,” the Mortgage Brokers Association of B.C. Said in a statement Wednesday.

In the statement, the association estimated that some 40 per cent of homebuyers are taking on variable mortgages. Read more

The Richmond total home sale for November, 2009 at 440 units showed a 20% drop in sales compared with the previous month sale of 544 homes. The supply of detached homes and townhomes was less than 50% as compared to a year ago. Similarly, condos listing was about 40% lower in November as compared to a year ago.

The total active listings at the end of November at 1,275 units were 10% lower than the previous month’s listings of 1,405 units, and just about 50% of the total listings of 2,520 in November 2008. The supply / demand (list to sale) ratio remained tight around 2.46 months. The past 10 months re-bounce in home sales, and lack of new inventory coming onto the market, continued to pushed home prices higher.
The market continued to be very active with home buyers ready to commit when they come across homes meeting their requirements. Sales activities remain strong, and many home buyers are looking out for new listings and the right homes to buy. The media and housing experts are cautioning home buyers that the housing market may be too rich and any adverse events may cause a pull back in home sales.

Will current bullish market continue?

The sales pace for November was lower than the previous 2 months. This can be attributed to the colder and wet weather that dampen sales. However, the lack of new supply and strong demand from home buyers continued to push home prices higher.

Home values continued to edge upward in November as demand in the Greater Vancouver housing market remains well above seasonal norms.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 12.4 per cent to $557,384 from $495,704 in November 2008. This price, however, remains down 1.9 per cent from the most recent high point in the market in May 2008 when the residential benchmark price sat at $568,411.!–more–>

“This unseasonably high level of demand can be attributed in large part to low interest rates, but it also speaks to the diverse range of housing options available in Greater Vancouver,” Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. “Prospective homebuyers today have more options at different price levels than ever before.”

The REBGV reports that residential property sales in November were the third highest volume ever recorded in Greater Vancouver for that month. Sales in the region totalled 3,083 in November 2009, an increase of 252.7 per cent compared to November 2008 when 874 sales were recorded and a 16.8 per cent decrease compared to the 3,704 sales recorded in October 2009.

“We are experiencing a brisker than normal market for this time of year, although we have begun to see a reduction in the number of homes listed for sale, which is normal as we head into the holiday season,” Russell said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 3,653 in November 2009. This represents a 21.3 per cent increase compared to November 2008 when 3,012 new units were listed, and a 26.6 per cent decline compared to October 2009 when 4,977 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.

At 11,039, the total number of property listings on the MLS® decreased 8.6 per cent in November compared to last month and declined 39 per cent from this time last year.

In contrast to this year, note that November 2008 was the lowest selling November in Greater Vancouver in 27 years.

Sales of detached properties increased 261.5 per cent to 1,164 from the 322 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 13.6 per cent from November 2008 to $757,209.

Sales of apartment properties in November 2009 increased 240.5 per cent to 1,396 compared to 410 sales in November 2008. The benchmark price of an apartment property increased 11.6 per cent from November 2008 to $381,945.

Attached property sales in November 2009 are up 268.3 per cent to 523, compared with the 142 sales in November 2008. The benchmark price of an attached unit increased 10.2 per cent between Novembers 2008 and 2009 to $469,686.

“The string of significant improvements in housing affordability in Canada finally came to an end in the third quarter. RBC’s affordability measures rose at the national level for the first time in six quarters for all housing types: by 0.5 percentage points to 27.6% for a standard condominium; by 0.7 percentage points to 32.3% for a standard townhouse; Read more

The Richmond total home sale for October, 2009 at 544 units kept up relatively well with the previous month sale of 570 homes. The supply of detached homes and townhomes continued to decline moderately, while condo listings grew slightly.

The total active listings at the end of October at 1,405 units were were just marginally lower than the previous month’s listings of 1,435 units. The supply / demand (list to sale) ratio remained tight around 2.65 months. The past 9 months re-bounce in home sales, and lack of new inventory coming onto the market, helped to pushed home prices higher.

The market continued to be very active with home buyers ready to commit when they come across homes meeting their requirements. Sales activities remain strong, and many home buyers are looking out for new listings and the right homes to buy.

Will current bullish market continue?

The fall season and the lack of inventory is expected to dampen sales. While seasonal reduction in sales for the autumn and winter months can be expected, home prices are expected to remain at current level.

Canadian existing home prices are now rising at a pace not seen in 20 years, fueling talk that a bubble may be forming in the market.

The average price of a home sold last month was $341,079, a 20.7% increase from a year ago, the Ottawa-based Canadian Real Estate Association said Monday. Sales also continued to climb with 42,288 units trading hands, a 41% jump from October, 2008. Read more

“According to them, the country’s growth rate will crash to just 1.6% between 2010 and 2012, and just edge up to 2.1% all the way through to 2019. This will be the result of factors I’ve already mentioned, namely a rapidly aging population and a massive debt overhang for both families and governments”.